Medicaid Expansion

In order to dramatically reduce the number of uninsured people in the United States, Obamacare provides substantial Medicaid expansion for qualified individuals. The Medicaid threshold before Obamacare was different for various groups. For example, for pregnant woman the Federal threshold was 133% of the Federal Poverty Level (FPL); but for working parents it was just 25% of the FPL. Obamacare sets an equal, common threshold 133% for all groups. Because the first 5% of income will be disregarded, this means that adult residents with a household income below 138% of the FPL will be eligible for the Medicaid expansion.

Medicaid Expansion: State by State

Before Obamacare, individual eligibility for Medicaid was very much dependent on the state. Some states (like Minnesota) had a very generous threshold largely exceeding the Federal requirements. Other states (like Alabama) were level with the Federal minimum. (See Table 1). Therefore, the impact of Medicaid expansion in states like Minnesota was quite different from states like Alabama (see Tables 2,3). (All tables below are taken from the ObamaCare Survival Guide. The latest data have been used, whenever available).

Table 1 – Pre-Obamacare Medicaid Threshold for Different States

State

Jobless Parents

Working Parents

Children’s Age

Pregnant Women

Adults w/o Children

Avg

Rank

0-1

2-5

6-19

Minnesota

275

275

280

275

275

275

Not Eligible

276

1

N. Mexico

30

69

235

235

235

235

Not Eligible

173

11

Tennessee

73

134

185

133

100

250

Not Eligible

146

21

Kentucky

36

62

185

150

150

185

Not Eligible

128

31

S. Dakota

54

54

140

140

140

133

Not Eligible

110

41

Alabama

11

25

133

133

100

133

Not Eligible

89

51

Table 2 – Impact of Medicaid Expansion on Minnesota

Jobless Parents

Working Parents

Children’s Age

Pregnant Women

Adults w/o Children

0-1

2-5

6-19

Before ObamaCare

275

275

280

275

275

275

Not Eligible

After ObamaCare

133

133

133

133

133

133

133

More Enrollees?

Probably a Slight Increase

YES

Table 3 – Impact of Medicaid Expansion on Alabama

Jobless Parents

Working Parents

Children’s Age

Pregnant Women

Adults w/o Children

0-1

2-5

6-19

Before ObamaCare

11

25

133

133

100

133

Not Eligible

After ObamaCare

133

133

133

133

133

133

133

More Enrollees?

Big Increase

Slight Increase

YES

Paying for the new Medicaid under Obamacare

Who will pay for Medicaid Expansion? During the first 3 years (2014-2016), the United States government will pay 100% of the cost. In subsequent years, the share of each state will increase – up to 10% in 2020 (see Table 4). Compare this with 57%; which is how much the U.S. Government pays for the cost of Medicaid to each state today. Obviously, individuals that are “newly eligible” for Medicaid (qualified after Jan. 1, 2014) will cost much less to states than the “old eligible”.

Table 4 – Paying for the new Medicaid

Year

U.S. Government

Each State Pays

2014 to 2016

100%

0%

2017

95%

5%

2018

94%

6%

2019

93%

7%

2020

90%

10%

According to the Supreme Court Ruling, U.S. States are allowed not to participate in the Medicaid expansion program; some states plan to do so. In such states people with income 100-138% of the FPL will not be covered by Medicaid. They will also be exempt from the Obamacare mandate. They are free to purchase health insurance through the exchanges, but they are not legally required to do so.

The tax credits included in the Obamacare will be offered only to individuals with household incomes between 100% and 400% of the FPL. The individuals with household incomes below the FPL but above the Medicaid eligibility (usually well below the FPL) will not qualify either for the tax credits or Medicaid if they live in states not participating in the Medicaid expansion.

Update. As of January 1, 2015, there are 28 states that participate in Medicaid expansion. The latest of the states, Pennsylvania, joined the list in 2015.

Let Liberty Medicare help you to get coverage through the Health Insurance Marketplace

Liberty Medicare is here to help you learn about Marketplaces and assist with eligibility determination for enrollment in a Qualified Health Plan (QHP) and for insurance affordability programs, which include Medicaid, CHIP, premium tax credit, and cost-sharing reductions. We will help you to compare plans, and enroll in coverage. All of our services are offered to you at no cost.

If you are considering buying insurance in the Health Insurance Marketplace, let us guide you. To see real quotes from insurance providers visit Federal or State Marketplace, fill out our Individual Health Quote form, or give us a call at 877-657-7477.

Other Content

We are a licensed
independent insurance agency assisting individuals within the following states: Delaware, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, and Virginia. This website is a private website and is not associated, endorsed or
authorized by the Social Security Administration, the Department of Health and Human
Services, or the Center for Medicare and Medical Services. This site contains basic
information about Medicare and services related to Medicare. By calling us (877-657-7477), you'll be directed to a licensed sales agent. If you would like to find out
more information about Government Medicare programs, please visit the official US
Government site.